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Growth Revival and Inflation

"...A growth acceleration is very likely in 2011, says Lakshman Achuthan, managing director of the Economic Cycle Research Institute, which publishes the closely watched Weekly Leading Indicators. The WLI has been signaling a revival in economic growth.

Achuthan says the WLI has been showing faster growth from private-sector sources well before the Fed's $600 billion fiscal stimulus or Washington passed the 2011 tax-cut package. As a result, U.S. demand should get a triple boost this year, and growth should be robust enough to let price increases stick.

The ECRI's leading inflation gauge indicates that inflation is edging up--although not to worrisome levels. Similarly, a rise in yields on longer-dated Treasurys over the past month is thought to reflect a pickup in investors' inflation expectations..."